A notable feature of the investment landscape over the past few months has been the 12 percent drop in the price of gold since September.

During that time, we've heard some incredibly bearish calls on gold from strategists at Goldman Sachs and Credit Suisse, among other shops. Rising real interest rates are said to be the death knell for gold.

Morgan Stanley, which for a while has touted gold as its number-one investment idea in the commodity space, isn't ready to throw in the towel just yet.

In fact, according to the bank's Chief Metals Economist, Peter Richardson, "The reasons for owning gold may be evolving."

What does that mean, exactly? Richardson argues that over the past 10 years, gold has actually undergone numerous evolutions in this manner.

From 2001 to 2008, Richardson writes, gold went up because of "1) a persistent increase in investment demand, 2) acceleration in producer de-hedging, 3) a decline in net official sector sales, and 4) a persistent failure on the part of the mining companies to respond to the incentive of a steadily rising price and materially lift production."

Then, from 2008 to 2012, gold was driven higher by "investors’ waning confidence in the stability of the global financial system and an unprecedented monetary easing by central banks."

In 2011, though, gold became tightly correlated with the trade-weighted U.S. dollar. Richardson attributes this to slowly declining financial stress and less surprises on the central bank liquidity front as time progressed.

"As this has happened, gold has returned to what BCA Research Inc has called its default setting – a tick-for-tick correlation with a range-bound US dollar in TWI terms. In the past, these periods of particularly strong and close correlation with the USD have proven to be consolidation phases before the next upside gold catalyst has appeared," writes Richardson.

The chart below shows this latest "evolution."

Bloomberg, Morgan Stanley Research

What happens next?

Morgan Stanley's house view as espoused by Richardson is that "we are about to witness the third installment of the Great Monetary Easing." That's a reference to the extremely loose monetary policy set to hit Japan and the attempts of other countries to not let their currencies strengthen too much in the face of a weaker Japanese yen.

To sum it all up, Richardson concludes, "In these circumstances, we believe that gold has demonstrated considerable technical strength, offers good value at current prices both as an entry level to the trading range between US$1,540/oz and US$1,800/oz and as an option on any remaining upside surprise above this range that might result from the third part of the Great Monetary Easing."